Demand Side Analysis of Microlending Markets in Germany

In developing and transition economies, microlending has become an effective instrument for providing micro businesses with the necessary financial resources to launch operations. In the industrialized countries, with their highly developed banking systems, however, there has been ongoing debate on the question of whether an uncovered demand for microlending services exists. The present pilot study explores customer preferences for microlending products in Germany. Among the interviewed business owners, 15% reported revolving funding needs and an interest in microloans. We find that potential recipients of microloan products are retail business owners, foreign business owners, and persons who had previously received private loans. Furthermore, financial products should feature rapid access to short-term loans.Entrepreneurship, Microlending, Market Research

Demand Side Analysis of Microlending Markets in Germany

In developing and transition economies, microlending has become an effective instrument for providing micro businesses with the necessary financial resources to launch operations. In the industrialized countries, with their highly developed banking systems, however, there has been ongoing debate on the question of whether an uncovered demand for microlending services exists. The present pilot study explores customer preferences for microlending products in Germany. Among the interviewed business owners, 15% reported revolving funding needs and an interest in microloans. We find that potential recipients of microloan products are retail business owners, foreign business owners, and persons who had previously received private loans. Furthermore, financial products should feature rapid access to short-term loans.entrepreneurship, microlending, market research

Comments to Usda on Rural Microentrepreneur Assistance Program

Comments to USDA Rural Development Agency regarding the development of administrative rules for the Rural Microentrepreneur Assistance Program authorized by the 2008 Farm Bill as submitted during USDA Listening MeetingRoom 107-A Whitten Building, U. S. Department of Agriculture, 12th and Jefferson Drive SW, Washington D.C. on January 26, 2009.�

The Business Consortium Fund: working capital for MBEs

The New England Minority Purchasing Council offers minority business enterprises (MBEs) help in obtaining short-term working capital.Commercial loans - New England ; Small business - New England ; Minority business enterprises - New England

Rethinking the Entrepreneurial Spectrum

Entrepreneurship can have many faces.Richard Hannah, social enterprise, social entrepreneurship, social business, social entrepreneur, social entrepreneurs, Tennessee, business, Tennessee's Business, middle Tennessee, Muhammad Yunus, Yunus Program, MTSU, Bangladesh

Local Initiatives and IMF Policies in Quito, Ecuador

If we are to define development as an increase in the freedoms people enjoy, then we may move beyond structural adjustments and foreign investment as means to create wealth in Ecuador and Latin America. Although not conclusively documented one way or the other [13], microlending is a promising path towards development from this perspective. At the very least, microlending offers hope to a segment of the population that would otherwise be disenfranchised. In Quito, Ecuador, microlending programs are creating wealth and expanding freedoms in a manner consistent with capitalism, while a good deal of IMF policies extract wealth from the poor through a central authority far-removed from the general population

Vulnerability, Trust and Microcredit: The Case of China?s Rural Poor

This paper investigates the economic conditions of rural households in China. Historical survey data indicate that over 80 per cent of rural households earn less than 4,500 yuan in net disposable income each year, that for the vast majority of rural households disposable income is insufficient to meet food consumption needs, and that in terms of economic growth rural households are receiving an ever decreasing percentage of China?s growing economy with rural household incomes being only 31 per cent of urban household income in 2004. To reduce vulnerability and food insecurity, this paper investigates the role of microcredit in China. It is argued that in China the conventional wisdom is to provide credit using traditional means, but we provide a model that shows how a microcredit market based on trust can co-exist with a commercial collateral-based market. This model is developed in detail and certain propositions are supported using dominant strategies in a trust-honour game based on the prisoner?s dilemma. The theoretical model is then applied to the case of microlending in China. It explains why, in the absence of trust, rural credit corporations do not make loans to the very poor. Furthermore, the model explains how Central party policies on rural credit can actually crowd out micro finance institution (MFI) and NGO microlending in China, and also explains why moneylenders dominate in many of the poorer regions of the country. From a policy point of view, the theoretical model indicates that trust-based lending, coupled with certain incentives, can go far in supporting growth opportunities in rural China. It is argued that Chinese policy should be flexible enough to permit trust-based microlending to the poor, regardless of how counterintuitive this must appear to the conventional wisdom. Indeed, in the absence of flexible credit strategies, China?s rural poor will remain in a persistent food-insecure poverty gap.equilibrium, game theory, rural, credit, China

Giving credit to the microlenders. Formal microlending, credit constraints and adverse selection: a case study of shrimp farmers in Bangladesh

Smallholder farmers have long been denied access to formal credit, largely because of the high administrative fees associated with loans. A possible solution to this problem, which has become increasingly popular, is the use of microcredit financing, where innovative means of securing the loans, such as peer monitoring, are used. This paper examines the effectiveness of formal microcredit schemes as compared to the traditional informal credit sources in a rural shrimp farming district of Bangladesh. We compare the two types of credit by studying the technical and allocative efficiencies of the two groups of borrowers. The findings suggest that farmers using both types of microcredit have difficulty accessing credit, often over-utilising labour in order to reduce the need for inputs that require cash at the beginning of the season, creating inefficiencies in production. However, the informal lenders, with their closer ties to individual farmers, were more successful in identifying those small-holders most likely to make the best use of the borrowed funds. Thus, although formal microcredit schemes do not impose the high administrative fees of traditional formal lending, they do not necessarily solve the problem of how to select successful borrowers.Economics, Bangladesh, Shrimp Farming, Fisheries, Community/Rural/Urban Development, Crop Production/Industries, Environmental Economics and Policy, Financial Economics, Livestock Production/Industries,

Big Ideas for Small Business Report

Big Ideas for Small Business is a national peer network led by the National League of Cities (NLC) that aims to accelerate efforts by local governments to support small businesses and encourage entrepreneurship.  This direct peer-to-peer engagement expands the capacity of city staff to explore common challenges, share proven strategies, and collaborate on new approaches for creating a more business-friendly city.  The Big Ideas for Small Business toolkit discusses important strategies for how local leaders can be better advocates for small businesses. Our report provides guidance on creating ecosystems that support small business growth; reorganizing city resources to better meet the needs of small businesses; and providing business owners with access to new sources of capital. Specific strategies highlighted in this report explain how to:Connect Small Businesses to Information and ResourcesEstablish a Small Business Resource Center Advocate for Small Businesses via Community-Led Councils or CommitteesProactively Engage the Local Business CommunityProvide Platforms for NetworkingCreate Incubator SpacesCelebrate Successful BusinessesDevelop One-Stop-Shops and Express Lanes at City Hall Streamline City Regulations and the Inspection ProcessHelp Small Businesses Build a Web PresenceSupport Microlending and CrowdfundingEncourage Local Small Businesses to Bid for City Contracts